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QS

QUANTA SERVICES, INC. (PWR)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered record second-quarter revenue of $6.77B and record adjusted EPS of $2.48; GAAP diluted EPS was $1.52. Adjusted EBITDA was $668.8M and backlog reached a record $35.8B, with RPO of $19.2B .
  • Revenue and EPS exceeded Wall Street consensus: revenue beat by ~$0.21B and adjusted/Primary EPS beat by ~$0.03; EBITDA was roughly in line on an adjusted basis versus consensus, though definitions differ (company reports adjusted; consensus often uses unadjusted)*.
  • Guidance raised: FY25 revenue to $27.4–$27.9B, adjusted EBITDA to $2.76–$2.89B, and adjusted EPS to $10.28–$10.88; GAAP diluted EPS guidance decreased to $6.47–$7.07, reflecting acquisition-related amortization and integration costs .
  • Strategic catalysts: acquisition of Dynamic Systems (closing consideration ~$1.35B plus earnout up to $216M) expected to be accretive and to contribute $425–$475M revenue and $45–$55M adjusted EBITDA in 2H25; $1.5B senior notes offering supports refinancing and liquidity .

What Went Well and What Went Wrong

What Went Well

  • Strong top-line and profitability: revenue up 21% YoY to $6.77B; adjusted EPS up 31% YoY to $2.48; adjusted EBITDA up 28% YoY to $668.8M .
  • Record backlog and multi-year visibility: total backlog $35.8B; selected for Idaho Power’s ~300-mile Boardman to Hemingway 500kV transmission project with construction underway, supporting Electric segment growth .
  • Management confidence and portfolio strength: “Demand for our services remains resilient, fueled by…load growth from technology adoption and manufacturing reshoring” — Duke Austin (CEO) . On the call, management emphasized sustained transmission opportunity and data-center driven load growth .

What Went Wrong

  • GAAP margin headwinds: corporate non-allocated costs (including amortization and acquisition/integration) increased, tempering consolidated operating margin at 5.5% (flat YoY) and dilutive to GAAP EPS versus adjusted .
  • EBITDA comparability: consensus EBITDA and company-reported adjusted EBITDA are not directly comparable; on a GAAP basis, EBITDA was $589.4M vs adjusted $668.8M, highlighting non-cash and acquisition-related impacts .
  • Guidance optics: while adjusted metrics were raised, GAAP diluted EPS guidance was lowered versus prior, reflecting higher amortization and integration costs tied to active M&A .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Billions)$5.59 $6.23 $6.77
Diluted EPS (GAAP) ($)$1.26 $0.96 $1.52
Adjusted Diluted EPS ($)$1.90 $1.78 $2.48
Operating Income ($USD Millions)$307.23 $239.08 $370.28
Operating Margin (%)5.5% 3.8% 5.5%
Adjusted EBITDA ($USD Millions)$523.23 $503.89 $668.76

Segment breakdown

Segment MetricQ2 2024Q1 2025Q2 2025
Electric Revenues ($USD Millions)$4,486.88 $4,944.39 $5,458.07
Electric Operating Income ($USD Millions)$426.58 $408.16 $552.62
Electric Operating Margin (%)9.5% 8.3% 10.1%
Underground & Infrastructure Revenues ($USD Millions)$1,107.51 $1,288.94 $1,314.93
Underground Operating Income ($USD Millions)$81.59 $76.87 $90.70
Underground Operating Margin (%)7.4% 6.0% 6.9%

KPIs and balance-sheet/cash metrics

KPIQ2 2024Q1 2025Q2 2025
Total Backlog ($USD Millions)31,310.80 35,251.52 35,844.54
Remaining Performance Obligations ($USD Millions)14,369.13 17,649.85 19,160.86
Cash From Operations ($USD Millions)391.31 243.20 295.71
Free Cash Flow ($USD Millions)258.61 117.75 170.44
Weighted Avg Diluted Shares (Millions)149.79 150.96 150.92

Consensus vs actual (Q2 2025)

MetricConsensusActual
Revenue ($USD Millions)6,565.56*6,773.01
EPS (Primary/Adjusted) ($)2.45*2.48
EBITDA ($USD Millions)663.54*668.76 (Adjusted)

*Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious Guidance (May 1)Current Guidance (Jul 31)Change
Revenue ($B)FY 2025$26.7–$27.2 $27.4–$27.9 Raised
EBITDA ($B)FY 2025$2.48–$2.61 $2.50–$2.63 Raised (midpoint)
Adjusted EBITDA ($B)FY 2025$2.68–$2.81 $2.76–$2.89 Raised
Diluted EPS (GAAP) ($)FY 2025$6.90–$7.50 $6.47–$7.07 Lowered
Adjusted Diluted EPS ($)FY 2025$10.05–$10.65 $10.28–$10.88 Raised
Net Cash from Ops ($B)FY 2025$1.70–$2.25 $1.70–$2.25 Maintained
Free Cash Flow ($B)FY 2025$1.20–$1.70 $1.20–$1.70 Maintained

Earnings Call Themes & Trends

TopicQ4 2024 (Prior Two Quarters)Q1 2025 (Prior Quarter)Q2 2025 (Current)Trend
AI/data center demandHighlighted accelerating power demand, record renewable backlog TAM ~$300B tech; Cupertino ahead; multi-year programs “Demand…resilient” from technology adoption; expanding addressable markets Strengthening
Transmission build (765kV)Expect robust transmission; planning lags becoming awards 765kV builds across RTOs; early stages, bookings expected Q3/Q4 Selected for Boardman–Hemingway; backlog visibility improving Accelerating
Tariffs/safe harbor/macroWatching policy changes; renewables tailwinds intact Contract terms limit tariff cost impacts; proactive supply chain optimization Customers safe-harbored into 2028–2029; noise manageable Manageable
Supply chain solutions (transformers, poles)Strategic supply chain access emphasized Transformer acquisition; supply-chain certainty as differentiator Minority stake in Bell Lumber & Pole to enhance pole supply certainty Expanding
M&A/platformsClosed two deals early ’25; segment reorg Inbound platform M&A; portfolio-driven accretion Dynamic Systems acquired; accretive in ’25–’26 Active/prudent
Free cash flow cadenceRecord FCF in Q4 and FY 2024 Back-half weighted profile reiterated FY25 FCF range maintained; aiming toward high end; Canada receivable timing cited Back-half weighted

Management Commentary

  • “Quanta delivered a strong first half…another quarter of double-digit growth…record total backlog of $35.8 billion. Demand…resilient, fueled by…load growth from technology adoption and manufacturing reshoring” — Duke Austin, CEO .
  • “We are increasing our full-year 2025 financial expectations for revenue, adjusted EBITDA and adjusted EPS” — Duke Austin .
  • “Our second quarter performance was ahead of our expectations…we are raising our full year expectations…Revenues…$27.4–$27.9B, adjusted EBITDA $2.76–$2.89B, and adjusted EPS $10.28–$10.88” — Jayshree Desai, CFO .
  • On transmission: “We’re at the very early stages of a large transmission build that’s coming…it continues to compound” — Duke Austin .

Q&A Highlights

  • Backlog and large-project cadence: Management noted early-stage stacking of large transmission programs (LNTPs) and cautious backlog discipline; Grain Belt Express not yet in backlog; SunZia transmission complete and replaced with new work .
  • Dynamic Systems synergy: Platform acquisition expected to cross-sell with Cupertino and utility customers, enhancing craft-led critical path solutions across technology, semiconductor, healthcare verticals .
  • Renewables and tariffs: Customers are safe-harbored; renewables and batteries remain integral to lowest-cost energy; pull-ins on LNTPs observed despite policy “noise” .
  • Free cash flow clarity: FY25 FCF unchanged ($1.2–$1.7B); aiming toward high end; timing of a large Canadian receivable cited .
  • Balance-sheet and leverage: Target leverage 1.5–2.0x; slightly above 2x post-deal but expected below 2x by year-end; intent to remain investment grade .

Estimates Context

  • Q2 2025 revenue of $6.77B vs consensus $6.57B* — beat .
  • Q2 2025 adjusted/Primary EPS $2.48 vs consensus $2.45* — beat .
  • EBITDA comparability: consensus $663.5M* vs company adjusted EBITDA $668.8M; GAAP EBITDA $589.4M .
  • Street looks for Q3 2025 EPS ~$3.26* and revenue ~$7.42B*, reflecting seasonal step-up and backlog conversion.

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Revenue and adjusted EPS beats, record backlog, and raised adjusted guidance underscore durable demand across transmission, renewables, and technology load-center markets; focus on adjusted metrics matters given acquisition amortization .
  • Electric segment operating margin improved to 10.1% (from 9.5% YoY), with Underground at 6.9%; mix shift and self-perform craft capabilities support margin resilience .
  • Dynamic Systems broadens platform into mechanical/process critical-path work; near-term accretion and strong ’26 contribution ($125–$175M adjusted EBITDA; $0.32–$0.47 adjusted EPS) provide upside optionality .
  • Transmission cycle is in early innings; recent awards (Boardman–Hemingway) and RTO planning suggest continued backlog growth and multi-year visibility .
  • Cash generation remains back-half weighted; FCF range intact with potential high-end outcome, though collections timing is a watch item .
  • Balance sheet flexibility reinforced by $1.5B notes offering and investment-grade intent; leverage expected below 2x by year-end, enabling ongoing organic investment and selective M&A .
  • Near-term trading: positive setup on raised adjusted guide and consensus beats; medium-term thesis: compounding TAM across transmission and load centers, platform M&A synergies, and portfolio-led execution provide sustained earnings power .